Life Insurance Denial

Insurance lawyers in Grand Prairie, Arlington, Fort Worth, Haslet, Roanoke, Newark, Saginaw, and other places in Tarrant County would want to be aware of this case.
The case opinion was issued in 1980, by the Texas Supreme Court. The style of the case is, Mattie Emmaline Mayes v. Massachusetts Mutual Life Insurance Company. It is one of those cases that Insurance Law Attorneys need to be aware of.
Rather than being decided on a motion for summary judgment, the way many insurance cases are decided, this case went to trial and there was a finding for Mayes. The intermediate appeals court reversed the trial court and then the Texas Supreme Court reversed the intermediate court and sent the case back to the trial court for further findings.
This was a case where Albert Mayes took out three insurance policies with Massachusetts Mutual Life. In the application for the life insurance coverage Mayes signed papers indicating he had not been treated by a physician, been treated or observed in a hospital, or undergone an electrocardiogram. Between the application and the final approval, Mayes experienced some medical problems that would have made his previous answers incorrect. A year later Mayes died suddenly from a heart attack of some undetermined variety.
Massachusetts Life denied Mayes claim for benefits based on the alleged misrepresentations in the application.
The Texas Supreme Court got into a discussion about the legal distinction between a “condition precedent” in an insurance policy and a “misrepresentation.” After clearing this legal distinction, which was relevant to the decision the intermediate appeals court rendered, this court based their ruling on the following:
“It is now settled law that if the answers to the questions in the application were untrue at the time they were given, the untrue answers constituted misrepresentations. There is no logical reason to give the failure to correct these same answers at a later time any greater significance than we give to answers which were originally untrue. In fact, there would be a greater chance that an insured was acting in good faith when he failed to report a change of condition than he would be in his originally making an untrue answer. Furthermore, the insurer knows the length of delay between the completion of the application and the issuance of the policy. If this period was significant, the insurer could easily ensure that the answers were still correct at the time of issuance of the policy either by putting a good health provision in the application or by requiring a supplemental statement of health. Here the insurer’s medical doctor made a limited second physical examination of the insured shortly before the policies were delivered. It is hard to understand why inquiry was not routinely made by the doctor at that time regarding the insured’s recent health. The agent personally delivered the policies to the insured and persuaded the insured to accept the policies with the increased premium. It is not contended that the insured made a false statement to the doctor or the agent.
Under these circumstances we hold that the insured’s failure to advise the insurer of the changes in his prior answers were misrepresentation. It is now settled law in this state that these five elements must be pled and proved before the insurer may avoid a policy because of the misrepresentation of the insured: (1) the making of the representation; (2) the falsity of the representation; (3) reliance thereon by the insurer; (4) the intent to deceive on the part of the insured in making same; and (5) the materiality of the representation. Here, although the jury found that these misrepresentations were material to the risk and were relied on by the insurer, the insurer failed to establish the legal defense of misrepresentation because it failed to secure a jury finding of intentional deception.”
An insurance attorney who handles these types of cases will have a lot of success in preventing an insurance company from proving an intentional misrepresentation.